The mighty is crumbling. From steel giant to economic black hole, ArcelorMittal’s saga is a tale of self-inflicted wounds and external pressures.
The decision to shutter the Newcastle mill is no surprise when one considers the myriad challenges the unit of the Luxembourg-based steelmaker of the same name has faced. High logistics, raw material and energy costs, deteriorating steel markets, and the never-ending onslaught of cheap Chinese imports — it’s enough to make anyone reach for the nearest panic button.
So here we are, with Amsa sitting atop a crumbling castle, demanding tariffs to shield itself from competitors. Yet tariffs are a double-edged sword. Sure, they could indeed protect Amsa, giving it a fighting chance against low-cost imports. Still, they come at the expense of smaller mills, the employers of more than 5,000 people, and the broader economy. It’s a zero-sum game.
Spare a thought for the communities of Newcastle. The mill closure is a blow to thousands of lives. About 3.500 jobs are on the line, and for a town that’s heavily reliant on the steel industry, this is nothing short of a disaster.
We commend the government — from which Amsa had sought policy support to keep the mill running — for seeing through the smokescreen. Amsa’s bloated cost structure is the elephant in the room that can’t be ignored. High tariffs might offer temporary relief, but they won’t solve the underlying issues of inefficiencies and excessive costs.
The real challenge lies in modernising operations, and finding sources of cheap inputs — a task that Amsa has sidestepped for far too long.
Correction: January 8 2024
A previous version of this story had the incorrect place for the headquarters of Amsa’s parent company.
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